Hilton Worldwide has been boosted by substantial contributions from business travel and group bookings during the first quarter of 2022, as the market showed signs of recovery after an overall "choppy start" to the year.
The global hotel company reported net profit of $211 million for the first quarter, compared to a net loss of $109 million in 2021.
Hilton said that revenue per available room (revpar) from business travel in March was only 9 per cent below March 2019’s figures, during the company's first quarter earnings call on Tuesday (3 May).
President and CEO Christopher Nassetta said there were “improving trends” for bookings from large organisations, with revenue in March from these accounts down by just 12 per cent on 2019, alongside “continued strength” from SMEs.
Nassetta said that currently business travel accounts for 45 per cent of Hilton's overall business mix, compared to 55 per cent pre-Covid. He projected this gap would close by the end of 2022 due to rising corporate profits, rebounding demand from larger businesses and reduced travel restrictions.
Hilton’s revpar for groups reached more than 75 per cent of 2019 levels by the end of March, led by an increase in smaller events and social gatherings.
"Group revenue booked in the first quarter for all future periods was down just 4 per cent relative to 2019 levels, and total lead volume for all future periods was up 3.5 per cent," added Nassetta.
Hilton is projecting that revpar from groups will recover to around 90 per cent of 2019 levels by the end of 2022.
But the company warned that organisations can expect to pay higher prices this year compared to 2019, with rates for company meetings rising by more than 13 per cent and new group bookings up by “high single digits” on pre-Covid rates.
Hilton's first-quarter global occupancy reached 58.1 per cent - a 14.6 percentage point improvement on the same period in 2021. In Europe, Hilton’s properties improved occupancy to 47.9 per cent in the quarter, which was an increase of 29.2 points on a year ago.
Hilton’s worldwide average daily rate was $139.17 for the quarter, a 35.2 per cent increase year-on-year, while revpar reached $80.84, which was up by around 80 per cent on last year.
In Europe, Hilton’s average daily rate was $120.70 during the first quarter, up by 75 per cent on 2021, while revpar increased by 350 per cent year-on-year to reach $57.70.
Hilton added 13,200 rooms to its global portfolio in the first quarter, contributing to a net increase of 7,800 rooms during this period.
The company also approved 22,200 new rooms for development, increasing Hilton's current pipeline to more than 410,000 rooms.